(This story was updated to add a photo gallery and new information.)
A federal whistleblower lawsuit accuses insurance companies and hospitals of defrauding Indiana’s Medicaid program of up to $700 million ― money that could have helped prevent a $1 billion shortfall that prompted state officials to cut services.
Instead, the lawsuit claims , industry-friendly officials in the state’s Medicaid office bowed to political pressure and in 2017 began curtailing efforts to recoup the improper payments, even after they were flagged by the state’s fraud detection contractor. The lawsuit identifies as much as $724 million in suspected fraud, but acknowledged there could be duplications in the claims data or other factors that would reduce the potential losses to the state.
The alleged fraud includes a wide range of billing and claim practices that violate program rules, including duplicative claims and claims for services that were supposedly provided months ― sometimes even years ― after patients died.